Tuesday, January 13, 2015

Distributed
solar photovoltaic (PV) system prices dropped by 12 - 19 percent nationwide in
2013, according to the third edition of a jointly written report on PV pricing
trends from the Energy Department's (DOE) National Renewable Energy Laboratory
(NREL) and Lawrence Berkeley National Laboratory
(LBNL). In addition, 2014 prices are expected to drop another 3 - 12
percent, depending on system location and market segment. Industry analysts
expect this trend to continue over the next couple of years, keeping the nation
on track to meet the DOE SunShot Initiative's 2020 targets.

"These price drops are
consistent with previous annual reductions achieved since 2010, when the Energy
Department's SunShot Initiative was established," NREL's David Feldman, a lead
author of the report said. "However, the report also indicates that there are
significant variations in reported pricing both geographically and across
market segments due to a variety of factors, including value-based pricing
based on local competition within the marketplace and prevailing electric
retail rates. Other factors include differences in specific system
configurations such as panel efficiency, mounting structure, and geographic location;
and the time lags between commitments and commercial operation for
utility-scale systems."

The report, Photovoltaic (PV) Pricing
Trends: Historical, Recent, and Near-Term Projections (2014 Edition), provides a high-level overview of historical, recent, and
projected near-term PV system pricing trends in the United States and examines progress in PV
price reductions to help the Energy Department and other stakeholders manage
the transition to a market-driven PV industry. The report shows that the general
downward trend in PV system pricing continued in 2013, and is expected to
continue through 2016. Other key findings include:

Modeled utility-scale PV system prices fell below $2 a watt
in 2013, and have continued to decline in 2014, to roughly $1.80 a watt, which
is 59 percent below what modeled pricing showed in 2010.

There is a difference of roughly $2 a watt between the median
reported price of the lowest- and highest-priced states for residential and
commercial systems (less than 10 kW in size); a similar price range also exists
within individual states.

There is a wide-range in analysts' PV pricing estimates,
however a number of analysts are now projecting long-term pricing in line with
the targets set by the SunShot Initiative for 2020. At these pricing levels, PV is expected to
reach widespread grid parity in the U.S. without federal or state
subsidies.

"There
is still considerable uncertainty as to how low PV system prices will drop in
the next five to 10 years," Feldman said. "However, there appears to be an
emerging consensus that the SunShot's price reduction targets are within reach
and more and more likely to be realized. We see this reflected in the fact that
many of the current projections are far lower than projections made in the recent
past by the same sources."

The report was
produced as part of an ongoing collaborative research effort between the two
labs focused on solar technology system-level cost analysis and modeling. This
briefing draws on several ongoing research activities at LBNL and NREL,
including LBNL's annual Tracking the
Sun report series, NREL's bottom-up PV cost modeling, and NREL's synthesis of PV market
data and projections.

The research was
supported by funding from the Office of Energy Efficiency and Renewable Energy,
in support of its SunShot Initiative. The SunShot Initiative is a collaborative
national effort that aggressively drives innovation to make solar energy fully
cost-competitive with traditional energy sources before the end of the decade.
Through SunShot, DOE supports efforts by private companies, universities, and
national laboratories to drive down the cost of solar electricity to $0.06 per
kilowatt-hour. Learn more at energy.gov/sunshot NREL
is the U.S. Department of Energy's primary national laboratory for renewable
energy and energy efficiency research and development. NREL is operated for the
Energy Department by The Alliance for Sustainable Energy, LLC.

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